How did J.P. Morgan, Vignette’s financial advisor, determine which companies to use in its trading multiples?
To select the companies used in its Public Trading Multiples Analysis, J.P. Morgan chose software companies that develop or provide software and services similar to that of Vignette, software companies that utilize the same or a similar business model as Vignette, and software companies with operating metrics that are similar to Vignette’s, including, but not limited to, revenue growth, profit margins, and relative profitability. In conducting this analysis, J.P. Morgan ultimately selected companies that, based on closing stock prices on May 1, 2009, had an Equity Value in the range of approximately $52 million to $1.8 billion, and had an Enterprise Value in the range of approximately $7 million to $1.9 billion. For purposes of the analysis, Equity Value was calculated by multiplying the stock price with the diluted share count of a company. Enterprise Value was calculated as Equity Value, plus total debt, less cash and cash equivalents. What multiples did J.P. Morgan use in its financ
